This article comes from Brikken and Cointelegraph Research
Release date: March 6, 2025
Editors Note
At the critical stage when the crypto market is shifting from concept to industry, Real World Asset (RWA) Tokenization is undoubtedly the core trend connecting the on-chain and off-chain asset worlds.
This report, “RWA Tokenization: Key Trends and Market Outlook to 2025”, written by the Brickken team, systematically sorts out:
The development of RWA (real world assets) on-chain;
The current status of mainstream asset classes (such as bonds, equities, real estate, funds, ABS, etc.);
The value gains that tokenization brings to real-world assets, such as how it reduces transaction and management costs, improves liquidity, and impacts on pricing efficiency. By reading this, you will learn how tokenization creates value by reducing underwriting and listing fees, compliance and reporting costs, and by enabling fragmented ownership and lowering market entry barriers;
Key technologies that power RWA, such as blockchain and distributed ledger technology (DLT), smart contracts, and oracles;
Structuring of RWA issuance, from transaction construction to digitization, primary distribution and post-tokenization management.
The report is both in-depth and practical. From JP Morgans ABS pilot to Franklin Templetons on-chain money market fund to the $30B real estate asset on-chain, the precise cases and data will help us clarify the RWA market trends.
Special statement: All articles of DePINone Labs are for information and knowledge purposes only and do not constitute any investment advice.
This report is compiled by DePINone Labs. Please contact us for reprinting.
——The following is the original text of the research report——
1. What is the tokenization of real-world assets?
Tokenization of real-world assets (RWA) refers to the representation of ownership and management of physical assets (such as real estate, commodities, bonds, and even intellectual property) in the form of digital tokens on the blockchain. These tokens can be traded 24/7, making them more accessible, efficient, and transparent than traditional financial transactions.
Other benefits of tokenizing real-world assets are also significant, including increased liquidity, enhanced transparency, reduced transaction costs, and real-time settlement capabilities through smart contracts. Tokenization also enables decentralized ownership by representing assets as digital tokens.
This democratizes markets that otherwise have low liquidity or high barriers to entry. Investors can purchase smaller shares of an asset, which broadens the investor base and improves liquidity. Additionally, the use of decentralized networks reduces reliance on intermediaries, which simplifies the trading process and improves security.
Historical background and evolution
The concept of asset tokenization emerged with the development of blockchain technology, which initially focused on digital currencies such as Bitcoin and then expanded to a variety of financial instruments and services.
The mid-2010s marked the beginning of the tokenization of real-world assets. Companies like RealT and RedSwan CRE 1 pioneered decentralized ownership of real estate by issuing digital tokens that represented shares of a property.
This move not only improves market liquidity, but also makes the traditionally closed investment market more open. While decentralized ownership is already possible off-chain, tokenization simplifies the process for investors and issuers and makes it easier to execute at scale.
As the technology matures, other asset classes, such as commodities, bonds, and funds, are also beginning to be tokenized. This shift has been fueled by the widespread adoption of decentralized finance (DeFi) protocols, which integrate tokenized assets for lending, borrowing, and trading. Today, tokenization is considered a transformative trend in the financial industry.
It is estimated that by 2030, the market size of tokenized assets could reach 30 trillion to 50 trillion US dollars. Asset tokenization is no longer limited to the financial market, but has also entered other industries such as supply chain management, art and intellectual property. It has the potential to subvert traditional practices and create new economic models.
2. Overview of blockchain technology and its role in tokenization of real-world assets
Blockchain technology is the foundation for the tokenization of real-world assets. It provides a decentralized, secure, and immutable ledger system for recording and verifying transactions. This can enhance transparency and security in asset management. Key aspects of blockchain technology that support RWA tokenization include:
Security and transparency: Blockchain technology ensures that all transactions are recorded in a transparent and immutable ledger, which reduces the risk of fraud and enhances the trust of market participants. When managing high-value tokenized assets, the integrity of transaction records is critical.
Smart Contracts: A significant advantage of blockchain is its ability to execute smart contracts, which are self-executing clauses written directly into the code. Smart contracts can automate payments, compliance checks, and asset transfers, reducing the need for intermediaries and lowering operating costs.
Interoperability and composability: Blockchain is able to interact with a variety of digital financial instruments and platforms, allowing tokenized assets to be seamlessly integrated into various ecosystems. This facilitates secondary trading of assets and their use as collateral on DeFi platforms.
Proof of Reserves and Data Oracles: Standards such as Chainlink’s Proof of Reserves and Data Oracles add an extra layer of security and trust to the ecosystem by allowing for real-time verification of the reserves of tokenized assets through connections to off-chain auditors. These mechanisms help maintain integrity and provide transparency.
Lower transaction costs and real-time settlement: Tokenized assets benefit from the lower transaction costs and near-instant settlement brought about by decentralized infrastructure.
3. Overview of Tokenizable Asset Classes
While theoretically any asset class can be tokenized, five financial asset classes are most common: debt, equity, asset-backed securities (ABS), funds, and real estate (see Figure 1).
According to Security Token Market, the total value of tokenized assets across all of these categories exceeds $50 billion by December 2024. This figure is expected to rise further in 2025 as tokenization continues to impact capital markets (see Figure 2).
Source: http://stm.co/
Equity tokenization allows company shares to be digitized into tokens, thereby decentralizing ownership and attracting a wider range of investors. Tokenization platform Brickken has adopted this approach to distribute shares in existing companies and create tokens to provide seed funding for startups. Equity tokenization not only expands participation, but also brings liquidity to traditionally illiquid equity instruments.
Asset-backed securities (ABS) are another key area for tokenization. Digital tokens backed by pools of loans or receivables increase transparency and simplify the securitization process. Traditional securitization relies on intermediaries, cumbersome documentation, and complex reporting, which drives up costs. Tokenization automates some of these steps through smart contracts. For example, smart contracts can transparently manage payment distributions directly to investors, eliminating the need for manual reconciliation.
A notable example is JPMorgan Chase’s initiative to tokenize auto loan receivables. The project demonstrates how blockchain can bring efficiency and transparency to the securitization market. Its main goal is to enhance the security and efficiency of payment processing. By replacing sensitive payment data with tokens, the bank reduces the risk of data breaches and fraud, as tokens are meaningless when intercepted. This approach not only protects customer information, but also simplifies transactions, as tokens can be processed faster than traditional data.
Additionally, tokenization reduces the storage of sensitive information, thereby reducing the compliance burden and associated costs.
Tokenization is also reshaping the fund management industry. Investment funds can issue tokens that represent fund shares, reducing administrative expenses and making fund participation more convenient. Franklin Templeton took advantage of this approach when launching the Franklin OnChain US Government Money Fund, which processes transactions and records shared ownership on the Stellar blockchain. This enables funds to reduce operating costs and provide greater transparency than traditional financial products. Another notable example is a proof of concept conducted by JPMorgan Chase and Apollo Global Management in 2023, demonstrating a system for rebalancing tokenized portfolios across multiple blockchains in seconds. It is predicted that this could reduce operating costs by 98% and unlock a $400 billion annual revenue opportunity for the asset management industry.
The transition from proof-of-concept to production environments is well underway, with 2024 marking the deployment of tokenized products such as liquidity instruments, bonds, and private equity funds. In 2025, institutions are expected to further embrace tokenization, bringing more asset classes (such as private credit) on-chain.
Real estate has long been considered an ideal candidate for tokenization due to its historically low liquidity. Tokenized real estate offers numerous benefits, including decentralized ownership, instant transaction settlement, enhanced liquidity options, and a simplified mortgage process. Investors who used to be locked into real estate positions for nearly a decade can now more easily sell their equity or fractional equity through tokenized markets.
Additionally, tokenized real estate assets can be used as collateral on DeFi platforms, enabling borrowers to access liquidity more efficiently than in the traditional banking system. Real-world applications of tokenized real estate cover a wide range of use cases, from entire properties traded on-chain to decentralized ownership of commercial and pre-development projects. Tokenization is also being applied to innovative areas such as seamless issuance, warehousing, and securitization of home equity lines of credit (HELOCs).
The STM’s upcoming report is expected to provide insights into the amount of real estate that has been tokenized, the project pipeline, and an analysis of past successes and challenges. This information will guide the next phase of tokenized real estate adoption. The STM report states that the industry already has $30 billion worth of real estate that has been tokenized or is in the tokenized pipeline (see Figure 3).
Source: http://stm.co/
While institutional adoption is a key driver of tokenization, the technology also presents significant opportunities for retail investors. By streamlining issuance and operations, tokenization makes traditionally inaccessible asset classes open to smaller investors. Notable examples include tokenized whisky funds, diamonds, art, renewable energy projects, and even niche areas such as car financing and Bitcoin mining.
3.1 Tokenized bond issuance
Tokenized bond issuance improves the efficiency and accessibility of traditional bond markets. First, tokenized bonds enable a wider range of investors to participate in the bond market by dispersing ownership. Tokenization also creates liquidity, as tokens can be traded more easily and frequently than traditional bonds. As with blockchain trading in other asset classes, market transparency can be improved, reducing misconduct and thus increasing investor confidence.
The benefits of tokenized bonds are not limited to faster settlement and lower transaction costs; they also support complex structures such as multi-tiered and multi-currency instruments. HSBC facilitated the issuance of HKD 6 billion equivalent of digital green bonds by the Hong Kong Monetary Authority in four currencies: Hong Kong dollars, RMB, US dollars and euros.
Infrastructure providers like Brickken, which is focused on simplifying the tokenization process for issuers, further accelerates the adoption of alternative assets. The continued growth of tokenization in both institutional and retail markets highlights its transformative potential. As adoption increases, the financial industry will move closer to a future where all asset classes are seamlessly integrated into the digital ecosystem.
The issuance was conducted through HSBC’s Orion platform and marked the world’s first multi-currency digital bond issuance. The adoption of tokenized bonds varies by country, reflecting the different levels of engagement with this innovative financial instrument (see Figure 4).
In May 2024, the eurozone completed its first experiment using blockchain to settle wholesale central bank transactions, involving 16 private companies, evaluating the interaction of TARGET services with the blockchain platform. The ECB conducted further trials between May and November 2024, involving more than 60 institutions and a total transaction volume of more than €1.59 billion.
Wholesale central bank transactions in Europe may soon be processed by blockchain infrastructure, as the ECB collaborates with technology pioneers such as Brickken through its European Sandbox program.
In Germany, the Federal Financial Supervisory Authority (BaFin) has played an important role in bond tokenization through a clear regulatory framework to encourage innovation. Well-known German companies such as Deutsche Börse have launched platforms such as Digital Bond Issuance (DBI) to simplify the bond issuance process. Several other regulators and central banks have also created frameworks or are clarifying the mechanisms for the issuance of digital tokens (see Figure 5).
3.2 Debt and Money Market Fund Tokenization
Tokenized liquidity products have seen significant growth in 2024, with major institutions expanding their product range or increasing their assets under management (AUM). Liquidity products are attractive due to their clear terms, standardized structures, and transparent mechanisms that can be audited on-chain.
Their use is not limited to investment, but can also be used as collateral for decentralized finance (DeFi) and institutional financial applications. For example, $BUIDL units have been used as collateral on platforms such as FalconX and Hidden Road. Hashnotes USYC also has a similar function on Deribit.
Traditionally, securities lending has been limited to private banking clients.
However, these forms of staking are now open to everyone thanks to the blockchain infrastructure’s lower transaction fees and simpler onboarding process.
Recent listings include Franklin Templeton’s $BENJI, WisdomTree’s multiple tokenized funds, Hashnote’s USYC, and BlackRock’s USD Institutional Digital Liquidity Fund ($BUIDL) on Securitize. $BUIDL became the largest tokenized fund in just 40 days of its launch, reaching a market cap of over $375 million within six weeks (see Figure 6).
As of December 31, 2024, its assets under management reached $648.5 million, demonstrating the potential for tokenized liquidity products to gain significant traction in a short period of time. Hashnote’s USYC has since surpassed $BUIDL.
Key features of BUIDL:
Asset Composition: BUIDL invests in high-quality, short-term instruments, including U.S. Treasuries and repurchase agreements, and seeks to maintain a stable net asset value while providing daily liquidity.
Blockchain Integration: BUIDL was initially launched on the Ethereum blockchain and expanded in November 2024 to include five additional blockchains: Aptos, Arbitrum, Avalanche, Optimism, and Polygon.
Investor accessibility: BUIDL is primarily aimed at institutional investors, offering shares pegged to the US dollar, with dividends distributed monthly in the form of new tokens.
Franklin Templeton is also combining blockchain technology with traditional financial products through its Benji Investments platform, which provides investors with easy access to the Franklin U.S. Government Money Fund on Chain (FOBXX). FOBXX is a mutual fund registered in the United States that uses a public blockchain to process transactions and record equity.
Each share of the fund is represented by a BENJI token, and investors can interact with the fund through a digital wallet via the Benji Investments app. FranklinChain U.S. Government Money Fund invests at least 99.5% of its total assets in government securities, cash, and repurchase agreements fully collateralized by government securities or cash. The fund aims to provide investors with a high level of current income while maintaining a stable share price of $1.00.
Franklin Templeton has also enabled the exchange between USDC and the U.S. dollar (USD) on the Benji platform. This feature also allows investors to use USDC to fund their investments.
The exchange service is provided by Zero Hash, a cryptocurrency and stablecoin infrastructure platform. Franklin Templetons Benji platform integrates blockchain technology and supports USDC exchange, which is a model of the integration of traditional finance and digital assets.
Looking ahead to 2025, expect newcomers such as Coinbase Asset Management, Glasstower, and Ripple to join incumbents such as BlackRock, Franklin Templeton, and UBS in driving adoption of tokenized liquidity products. These developments herald the beginning of a broader shift that will see tokenization expand into more complex financial instruments.
4. Added value brought by tokenization
This section explores how tokenization can add value by reducing transaction and administrative costs and improving liquidity, illustrated by comparisons with traditional investment vehicles such as real estate investment trusts (REITs) and historical analogies from the financial sector.
Traditionally, investing in large-scale assets such as real estate or private equity funds involves high costs such as underwriting, listing, compliance and reporting. These costs are particularly significant in publicly traded REITs, but tokenization provides a more efficient alternative that can significantly reduce these burdens.
Tokenization can be likened to other important steps in the digitization of finance. Before Nasdaq launched in the early 1970s, the New York Stock Exchange (NYSE) relied on a manual open outcry system where traders gathered on the floor and negotiated prices face to face.
This process results in slow price discovery and a lack of transparency, often creating information asymmetry, giving those with faster or better access to price data a clear advantage, and making prices prone to inaccuracies.
As the worlds first electronic stock market, Nasdaq has greatly improved price transparency.
Investors can now see the bid-ask spread in real time, which leads to more accurate pricing and more liquid markets. Nasdaq’s electronic trading system demonstrates how greater price transparency leads to more efficient markets, a principle that directly relates to the benefits of blockchain-based tokenization today.
Underwriting and listing fees
Traditionally, real estate investment trusts (REITs) incur significant costs when conducting an initial public offering (IPO). Underwriting fees of 5-7% of total proceeds, and annual listing fees on major stock exchanges such as the New York Stock Exchange (NYSE) or Nasdaq can range from $125,000 to $500,000, can have a significant impact on returns.
Tokenization eliminates many of these costs. By issuing digital tokens representing fractional ownership on a blockchain platform, issuers can bypass many intermediaries, including investment banks and underwriters. In addition, it eliminates the high costs of listing on a stock exchange. This makes the financing process more straightforward and cost-effective, benefiting both issuers and investors.
Compliance and reporting costs
Publicly traded real estate investment trusts (REITs) face strict compliance and reporting requirements. These include the need to file regular reports with regulators such as the U.S. Securities and Exchange Commission (SEC), which incurs significant legal and audit costs.
Many tokenization platforms also offer automated compliance features such as Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, streamlining what is otherwise a time-consuming and costly process.
Ownership segmentation and market access
Tokenization can break assets into smaller, more accessible pieces, making it easier for investors to buy and sell portions of larger assets such as commercial real estate or private equity funds.
This increased accessibility improves liquidity as more investors can participate in previously inaccessible markets. The ability to trade fractional ownership shares in real time on a blockchain platform ensures that investors can quickly enter and exit positions without the long holding periods typically associated with long and illiquid assets.
Impact on pricing efficiency
Liquidity is closely tied to pricing efficiency. In highly liquid markets like publicly traded REITs, prices tend to reflect the true value of the underlying assets.
This is because information spreads quickly and buyers and sellers have many opportunities to trade, allowing for accurate price discovery. In contrast, in less liquid markets like non-traded REITs, price movements are more dramatic.
In these markets, fewer participants can create wild price swings. Tokenized assets can improve liquidity by being traded 24/7 on blockchain platforms, allowing for more consistent and accurate price discovery, similar to the transparency that Nasdaq introduced in the early 1970s.
Reduce information asymmetry and improve liquidity
Using the Nasdaq’s impact on stock trading as an analogy, tokenization can reduce information asymmetry in illiquid markets. Public blockchain technology ensures that all participants have equal access to transaction records and price data, reducing the advantages of insiders and creating a more level playing field.
Tokenization enables investors to trust the accuracy of asset prices because ownership, transaction history, and market data can be updated in real time. As a result, the liquidity of these assets has increased significantly, and investors no longer need to apply a liquidity discount when evaluating asset prices.
Liquidity Discount
Traditionally, illiquid assets are priced at a discount compared to more liquid assets due to the risk and inconvenience of the long holding period.
Non-traded REITs often suffer from liquidity discounts due to lack of market access, with investors demanding higher returns to compensate for the lack of liquidity. Tokenization allows for smoother secondary market trading, which reduces the need for these discounts. With increased liquidity, tokenized assets are more favorably priced, reflecting their true market value without being penalized for poor liquidity.
Secondary market transactions
Tokenization also allows for secondary market trading, which is often limited or unavailable in traditional asset markets such as real estate or private equity. This is a huge benefit to portfolio managers, allowing them to rebalance their portfolios more easily and quickly and respond quickly to market changes.
5. Technologies driving tokenization
Blockchain and Distributed Ledger Technology (DLT)
Blockchain, the underlying technology for tokenization, is an immutable ledger that ensures a secure record of transactions and asset ownership. Blockchain platforms provide a programmable environment in which tokens can be created, traded, and transferred globally, reducing friction.
These platforms also enable instant settlement, reducing the latency (T+2 or T+3) in traditional financial systems. This not only speeds up transactions, but also reduces counterparty risk associated with delayed settlement.
Smart Contracts
Smart contracts are a key component of blockchain systems. They can automate processes that would normally require human intervention or a trusted third party.
These programmable protocols allow complex financial transactions to be automatically executed, such as dividend payments, bond issuances, or fractional ownership allocations, based on preset conditions.
In Tokenized Real Assets (RWAs), smart contracts can be configured to manage a variety of tasks:
Automated Payments: Profit sharing, interest payments, or coupon distributions to token holders are automatically executed based on the performance or events of the real asset.
Governance and voting rights: For tokenized stocks or real estate, smart contracts can be used to grant voting rights to token holders, making corporate governance more convenient and transparent.
Compliance and regulatory oversight: Smart contracts can embed know-your-customer (KYC) and anti-money laundering (AML) requirements directly into the lifecycle of an asset, ensuring that only authorized entities can interact with tokenized assets.
Oracle
Although blockchain networks are self-contained, many tokenized assets require real-world data to function accurately.
Oracles, acting as intermediaries between blockchains and the outside world, are key to bringing off-chain data into blockchain ecosystems. Oracles facilitate the integration of real-time information (such as asset prices, weather conditions, or supply chain data) into smart contracts.
This allows tokenized assets to accurately reflect real-world conditions. For example, in the case of tokenized commodities, an oracle can provide real-time price updates for gold or oil, ensuring that the value of the token is always consistent with the physical asset it represents.
Cross-chain interoperability
As tokenization evolves, assets need to be able to move seamlessly between different blockchain networks. Cross-chain interoperability allows tokenized assets to interact with multiple blockchains to facilitate liquidity and expand market access.
Without secure and efficient cross-chain infrastructure, tokenized assets will be restricted to isolated liquidity pools, which may hinder the wider adoption of tokenized financial instruments.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is a popular set of standardized protocols for facilitating this communication. Cross-chain solutions not only improve the liquidity of tokenized assets, but also allow institutional investors to access multiple markets without having to interact with each blockchain independently.
Token Standards
Tokenization relies on established token standards to ensure compatibility and security across different platforms. For example, Ethereum’s ERC-20 standard governs fungible tokens, while ERC-721 is used for non-fungible tokens (NFTs), which are often used to tokenize unique assets such as art or real estate.
By following a standardized token format, tokenized assets can be easily integrated into various decentralized applications (DApps) and exchanges, increasing their marketability and liquidity.
Reserve Audit
A key challenge in tokenizing physical assets is ensuring that digital tokens are fully backed by the corresponding physical assets. Reserve audit mechanisms can involve third-party auditors, providing institutions with a way to verify that tokenized assets (such as stablecoins or tokenized gold) are indeed backed 1:1 by reserve assets held off-chain. This enhances investor trust and confidence and reduces the risk of fraud or over-issuance.
Blockchain-based Proof of Reserve solutions, such as those provided by Chainlink, can automatically verify the reserves of crypto assets in real time and publish the data on-chain. This ensures transparency and mitigates the risks associated with undercollateralized assets.
For example, Chainlink’s “Secure Minting” provides further enhancements through Proof of Reserves. It embeds programming logic that does not allow tokens to be minted unless there is a verified proof of reserves. Secure Minting prevents infinite minting vulnerabilities, where malicious actors can create uncollateralized assets.
Privacy protection technology
Privacy is an important consideration for assets associated with sensitive financial data or personally identifiable information. Zero-knowledge proofs (ZKPs) allow a provable party to cryptographically prove partial information in a digital asset without fully disclosing it.
For example, financial institutions can verify that users have sufficient funds to purchase tokenized assets without revealing the total balance of their accounts.
Privacy-preserving technologies are becoming increasingly important in enabling compliance with regulations such as GDPR, while still allowing tokenized assets to be managed securely in a decentralized environment.
6. Structure of tokenized asset issuance
Tokenized asset issuance is a process that combines traditional financial structures with blockchain technology to create digital tokens that represent ownership or participation rights in physical assets. The structure of a tokenized asset issuance typically follows a series of stages, including transaction structure design, digitization, primary distribution, post-tokenization management, dividend distribution, and secondary trading (Figure 7).
These stages can be described as follows:
1. Transaction structure design
This initial phase involves the legal and financial organization of the asset, determining how it will be tokenized, and establishing a framework for the institution to issue tokens. Key decisions include:
Asset identification and legal structure: The issuer must identify the underlying asset, such as real estate, bonds, or private equity funds, and create an appropriate legal structure to hold it, usually a special purpose vehicle (SPV). The SPV becomes the entity whose ownership is tokenized. The legal structure ensures that token holders have clearly defined rights, such as partial ownership, profit sharing, or debt repayment.
Compliance: Ensuring that the token issuance complies with the legal and regulatory framework of the jurisdictions in which the tokens will be issued. This includes Know Your Customer (KYC), Anti-Money Laundering (AML), securities regulations, and adherence to relevant frameworks.
2. Digitalization
In this phase, physical or traditional ownership records are digitized and placed on the blockchain. Key considerations include:
Digital Member Register (ROM): The ownership of assets is recorded digitally on the blockchain. Each investor’s share of the asset is stored as tokens, which ensures a secure and immutable record of ownership.
Smart contracts: Programmable operations are set up on the blockchain to define the terms of the token and automate processes such as compliance checks, dividend payments or shareholder voting. These smart contracts improve operational efficiency by removing the need for middlemen in daily tasks.
3. Main distribution
Once tokens are created, they are issued to investors in exchange for capital. This is equivalent to an initial public offering (IPO) in the form of tokenized securities. The distribution process includes:
Investor Onboarding: Investors receive tokens only after undergoing KYC and AML checks. Once approved, their information will be recorded on the digital ROM.
Token issuance: Tokens are issued to investors. Details of each token holder and their fractional ownership of the asset are immutably recorded on the blockchain. Smart contracts can automate various corporate actions at this stage, such as defining shareholder rights and dividend distribution.
4. Post-Tokenization Management
This phase refers to the ongoing management of tokenized assets, where smart contracts play an important role.
Corporate Action Management: Automating tasks such as distributing dividends, conducting shareholder votes, and implementing ownership changes. The increased efficiency of smart contracts enables asset managers to reduce administrative costs.
Compliance Maintenance: Continuously monitor compliance requirements to ensure that all regulatory obligations such as reporting and KYC/AML protocols are met throughout the token lifecycle.
5. Continuous activities
5 a. Ongoing activities
Once tokens are issued and the asset begins generating income, dividends can be paid to token holders. Smart contracts are used to automate the dividend distribution process and ensure that payments are made in accordance with the rights attached to each token. This reduces the operational burden on asset managers and allows for faster and more accurate payments to investors.
5 b. Secondary Trading
The final stage is secondary trading of tokens. Once investors hold tokens, they can trade them on regulated secondary markets or peer-to-peer.
Enhanced Liquidity: Tokens provide liquidity to traditionally illiquid assets such as real estate or private equity. Investors can trade tokens on secondary markets, allowing for faster and more cost-effective exits than traditional asset sales.
Compliance and Market Regulation: For secondary trading, exchanges or platforms that handle security tokens must comply with regulatory frameworks such as securities laws. This ensures investor protection and a transparent trading process.
The lifecycle of tokenized asset issuance can be summarized as a smooth process that leverages blockchain to improve efficiency and liquidity. Transaction structure design will be similar to traditional issuance, and then digitized by putting the transaction structure into blockchain infrastructure. Automated token issuance and distribution through smart contracts. Post-tokenization management and secondary trading unlock the true value of tokenization by reducing costs and improving liquidity.
Conclusion: Looking to the future
The tokenization of real assets (RWAs) has reached a tipping point and is transitioning from isolated pilot projects to broader institutional adoption. However, achieving widespread adoption requires concerted efforts to address existing barriers and foster an ecosystem conducive to innovation.
While 2024 marks a major milestone for tokenization, the journey is far from over. The transition to production-grade use cases for tokenized bonds, real estate, and private credit shows that the market is maturing.
However, the path forward will require continued innovation, collaboration, and education to address remaining challenges and unlock the full potential of tokenized physical assets. McKinsey currently projects that the underlying value of tokenized assets will reach $2 trillion by 2030 (Figure 8).
Institutions that adopt tokenization early will gain a competitive advantage, capture new revenue streams, and lead the way in reshaping global financial markets. In this dynamic environment, the role of forward-thinking entities like Brickken at the intersection of technology, compliance, and education cannot be underestimated.
By building partnerships with regulators and market participants, they are laying the foundation for a more inclusive, efficient and transparent financial future. The stage is set for tokenization to redefine how assets are managed, traded and accessed - ushering in a new era of financial innovation.
Disclaimer
Please note that nothing stated, mentioned, referenced, linked or covered in this publication constitutes financial or legal advice. Security Token Advisors and the Security Token Markets team may own or be considering owning one or more of the cryptocurrencies, security tokens, stocks, ETFs and other financial investments included in this report.
Investing in crypto assets carries risks and may result in total loss of capital. In addition, their regulation varies from jurisdiction to jurisdiction.
Please do your own research on any financial and legal decisions and consider consulting a financial advisor and/or attorney before making any decisions or choices that may be reflected in this publication.
Special statement: All articles of DePINoneLabs are for information and knowledge purposes only and do not constitute any investment advice. This report is compiled by DePINoneLabs. Please contact us for reprinting.
